Financial forecasting is an essential business tool for predicting income, expenditure and cash flow. Sustaining a proactive (rather than reactive) mindset can help prepare a company for unforeseen reductions in revenue.
Ken Bowles, CFO at WilsonHCG, recently spoke to reporters at the Business Journals Leadership Trust to share insights on how business leaders can prepare for an unexpected drop in income.
He said it’s really important to consider the long-term consequences when striving to reduce expenses within a company. Short-term decisions, he added, can become counterproductive in the long run, making it vital to anticipate the long-term changing economic forecasts.
Bowles said: "Cutting headcount too drastically during an economic downturn can have a detrimental effect on the business once the economy picks up again because the company will shift its focus to hiring people to replace those who were laid off.”
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